Existence and Nature of Audit Expectation Gap: Nigerian Perspective

The audit expectation gap is critical to the auditing profession because the greater the unfulfilled expectation from the public, the lower the credibility earning potential and prestige associated with the work of auditors. The study examined the level and nature of expectation gap (performance gap) between auditors and users of financial statements. It sought to establish whether audit expectation gap exists in Nigeria and the perception of the users’ group on its existence. Respondents view was also sought on how the gap could be narrowed. Chi-square (χ2) was used to analyze the data obtained from the study. The data were obtained through questionnaire. One hundred and sixty (160) copies of the instrument were distributed using purposive sampling technique. In this study, a cross-sectional survey was conducted to capture the perceptions of users of financial statements in Nigeria. The tests of hypothesis were done using Microsoft Excel 2010 version. Tests were carried out at a significant level of 5% and three degree of freedom. The findings of the study indicated that there is a wide expectation gap in the areas of auditors’ responsibility for fraud prevention and detection. Audit expectation gap has negative impact on auditor’s credibility. The users of financial statements should be enlightened more on the responsibilities of auditors on the financial statements, the role of the auditor should be clarified and quality control measures should be observed in audit firms.